To free or not to free (ride): a comparative analysis of the NATO burden-sharing in the Czech Republic and Lithuania

ABSTRACT

The recent rise in the defence budgets among the NATO members reawakens the free-riding dilemma. This article provides an analysis of the defence spending of two new member states, the Czech Republic and Lithuania. Based on the free-riding theory, we explain why some of the new NATO members decide to increase their defence budgets (Lithuania), and others do not (Czech Republic). In contrast to the majority of works which focus either on the US as the biggest spender or on the “old” members of the Alliance, we explain under what circumstances some of the small European states who became new NATO members started to increase their defence budgets even though they do not have to, and the literature suggests that free-riding is easier. In the process, we identify three crucial factors that in?uence the decision-making process in this regard: the level of threat perception, economic situation, and the US pressure.     

Militarisation of cooperation against mass migration – the Central European Defence Cooperation (CEDC)

As a result of the migration crisis of 2015–2016, the management of mass migration and border control became militarised in Central Europe, and this process has also reshaped the dynamics of multinational defence cooperation in the region. Accordingly, while the so-called Central European Defence Cooperation (CEDC) was created by Austria, Croatia, the Czech Republic, Hungary, Slovakia and Slovenia in 2010 to support NATO and EU capability development projects via defence cooperation, after the migration crisis it became the major Central European forum for military cooperation against irregular mass migration. Although many defence officials in the region are not necessarily enthusiastic about this development, the Central European political environment and also practical defence considerations pushed the defence ministries of CEDC countries towards deeper cooperation on border control, as well as better coordination with ministries of interior affairs on the national and the regional levels.     

Country survey XVI the defence sector in the economy of a declining superpower: Soviet Union and Russia, 1965-2001

The Soviet Union was able to develop a large military-industrial complex and become the world's second superpower despite deficiencies in its centrally planned economy because defence was given high priority status and special planning, rationing and administrative mechanisms were used to attain national security objectives. However, in the period 1976-85 the effectiveness of priority protection diminished and defence institutions experienced more of the problems typical of the shortage economic system. The heavy defence burden also created growing difficulties for the civilian economy. The attempts by the Gorbachev government to reform the defence sector and improve defence-economic relationships during perestroika (1985-91) uniformly failed. For most of the transition period, the Russian military-industrial complex has been adversely affected by its low priority status, cuts in defence spending, instability of the hybrid politico-economic system, and negative growth of the economy. The armed forces and defence industry have been reduced in size and their outputs of military services and equipment have fallen to low levels. Nevertheless, the Russian armed forces still have over one million troops, significant stocks of sophisticated conventional weapons, and a large nuclear arsenal. The government of President Putin has raised the priority of the defence sector, increased real defence spending, and adopted ambitious plans to revive Russian military power. It is likely, though, that tight resource constraints will hamper efforts to reform the armed forces and to upgrade weapons. By 2010 Russia will be an important, but not dominant, military power in Eurasia.     

European defence industry consolidation and domestic procurement bias

How have European cross-border defence industrial mergers and acquisitions affected domestic procurement bias among the major EU powers? This article departs from the findings of Andrew Moravcsik more than two decades ago suggesting that major West European states had no ingrained preferences for defence industrial autarchy. When cross-national armament projects were derailed, this could be attributed to political efforts of national defence industrial champions favouring purely domestic projects. As former national champions join pan-European defence groups, their preferences are likely modified. Does this shift procurement towards non-European “off-the-shelf” solutions which, according to Moravcsik, are favoured by defence departments? Or does it give impetus to a stronger preference for European as opposed to domestic systems? In this article, procurement patterns in the aftermath of cross-border defence industry consolidation will be analysed. Procurement bias is assessed in two industry segments characterised by pervasive consolidation.     

Memory,magic and militias: Cora Indian participation in Mexico’s wars,from the reforma to the revolution (1854-1920)

ABSTRACT

Mexico’s Cora Indians have played an outsized role in national history, thanks to their skilful use of guerrilla tactics and success in forging strategic alliances with outside forces in defence of their cultural, territorial and political autonomy. Cora participation in elite struggles between Liberals and Conservatives (1850–73), and subsequently in the Mexican Revolution (1910–20), helped to shape the way that both conflicts played out in Western Mexico. Such participation also allowed Cora communities to keep hold of traditional landholdings in the face of political and economic reform, while sowing the seeds for the foundation of the Mexican state of Nayarit.     

Small countries and the consolidation of the European defence industry: Portugal as a case study

In this paper, we analyse the dilemma confronted by a small country in relation to the consolidation taking place in the European defence industry. Assuming that Portugal must maintain its armed forces, and must retain a minor defence industry, this industry must be competitive in small niches. Competitiveness must be based on, amongst other elements, technical efficiency and technological change. We investigate this issue, first characterizing the threats faced by the Portuguese defence industry, then investigating its present efficiency and finally, we discuss its role in the consolidation of the European Industry. We conclude that the Portuguese defence industry has no alternative but to opt for innovation and European partnership, which are complementary policies, but which require the active involvement of the stakeholder (i.e. the Government) in effecting these fundamental shifts in direction and emphasis. If this strategy does not succeed, the defence policy should be based on offsets.     

Turkey’s strategic choice: buy or make weapons?

Turkey has been investing in its national defence industrial base since the 1980s. As with other developing countries, Turkey’s motivations for investing in national defence industries can be boiled down to the pursuit of defence autarky, economic benefits and international prestige. However, after 40 years of investment, Turkey is unable to reach the primary goals of defence industrialisation. We argue that three factors are important to understanding Turkey’s persistence in these primary goals. First, Turkey believes that there is an overall improvement in its defence industrial capabilities and the goal of autarky is still reachable. Second, increased defence exports support the belief that Turkish defence industries have become sustainable and the trend will continue in the future. The third reason, perhaps most important of all, has to do with the domestic political gains of defence industrialisation: the AKP uses defence industry and indigenous weapon systems for prestige and, therefore, garners broader support.     

Are the Baltic States and NATO on the right path in deterring Russia in the Baltic?

ABSTRACT

The aim of the current study is to discuss which particular factors Russia considers as sufficient deterrent capabilities and whether the national defence models implemented in the Baltic countries have the potential to deter Russia's military planners and political leadership. Whilst the existing conventional reserves of NATO are sizeable, secure, and rapid, deployment is still a critical variable in case of a conflict in the Baltic countries because of the limited range of safe transportation options. However, whilst the Baltic States are developing their capabilities according to the priorities defined by NATO in 2010; which were updated after the invasion of Crimea in 2014, Russian military planners have meanwhile redesigned both their military doctrine and military forces, learning from the experience of the Russo-Georgian war, the Russia-Ukraine conflict, and other recent confrontations. Accordingly, there is a risk that the efforts of the Baltic countries could prove rather inefficient in deterring Russia.     

Success and failures of the Gripen offsets in the Visegrad Group countries

The Soviet-led Council for Mutual Economic Assistance member, Central European countries found themselves in a difficult political and economic situation after the collapse of the Soviet Union. Three post-Eastern Bloc countries formed the Visegrad Group to strengthen their ties to the West, but the need for foreign investment, job creation and technology transfer was urgent.

This is when military modernisation also came into the picture and the counter-trade—as known as offset—as a tool to help these economies. A trade practice which was meant to energise these economies via defence acquisitions linked economic programmes.

Two Visegrad Group member countries, Hungary and the Czech Republic decided to sign offset agreement with the defence firm SAAB to license Gripen fighter aircrafts. This study intends to analyse if these deals were able to help governments to reach their objectives or the two countries were unable to take advantage of the offset programmes.     

The Development of Military Logistics: An Introduction

Abstract

John Weston looks at the prospects for defence and security with tn a transformed Europe, concentrating on the increased importance of atr power within the military armoury. Looking to the future, he pinpoints key technologies and thetr bearing on aircraft design and spots trends in industry and the defence industrial base which are likely to have an impact wtthin the next 20 years     

Domestic political and external security determinants of the demand for greek military expenditure

By European Union and NATO standards, Greece consistently allocates substantial human and material resources to defence. The Greek defence burden (i.e. military expenditure as a share of GDP) has invariably been appreciably higher than the EU and NATO averages. The paper applies an autoregressive distributed lag model (ARDL) to present cointegrated estimates of the demand function for Greek military expenditure, in which domestic political factors and external security determinants are incorporated. Our empirical findings suggest that Greek defence spending over the period 1960-1998 has been influenced by both external security concerns, namely Turkey, as well as changes in the domestic political scene.     

Globalisation in the defence industry: An exploration of the paradigm for us and European defence firms and the implications for being global players

This paper explores some of the key issues associated with the restructuring of the defence industry. A comparison is made between the US and the European Defence Industrial Bases in terms of the drivers for change and the paradigms within which change has taken place. Having shown that some very important differences exist, the paper then explores the approaches that have been adopted for industry consolidation and references them to the academic literature on mergers and acquisitions (M&As) and strategic alliances (SAs). Given that most of the key defence players recognise the need to be global players, the paper presents an argument that the European firms’ experience of operating with a wide range of forms of corporate alliance will serve them in good stead for operating on a global defence scale. US firms, in contrast, have focused largely on M&A activity.     

Patents and Dual-use Technology: An Empirical Study of the World's Largest Defence Companies

Abstract

This paper examines the generation of technological knowledge by leading companies in the defence industry. In particular, we test whether the characteristics of large defence companies are related to both the production of different types of patents (civilian, military and mixed), and the generation of dual-use technologies. To explore these links, we rely on economic data for the top 100 defence companies from the Stockholm International Peace Research Institute database, and patent information from the Worldwide Patent Statistical Database. Our results show that the relationship between the production of civilian patents and the size of the company is positive and significant. However, this relationship does not hold for the production of military patents. Furthermore, the military commercial profile is unrelated to the generation of military patents. Regarding the involvement in dual-use technologies, firms engaged in dual-use are those with higher military sales, a greater number of employees and a larger number of patents (civilian, military and mixed) than those not engaged in dual-use. Furthermore, we found a skill effect (more involvement in dual-use per employee) in European firms compared to US firms. These findings help to identify which firms should be targeted by government policies if increasing dual-use technologies becomes a political objective.     

Defence Transformation in South Africa: Sharing the experience with the Forces Armées de la République Démocratique du Congo

“There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of things. For the reformer has enemies in all who profit by the old order, and only lukewarm defenders in all those who would profit by the new order”—Machiavelli

This essay was written after a team of the Institute for Security Studies visited the Democratic Republic of the Congo (DRC) to share their experiences of the challenges of defence transformation with Congolese officials and members of civil society.

It discusses the South African defence transformation process and experience in detail and highlights the imperative for visionary leadership, commitment and communication as prerequisites for successful transformation. The DRC faces a unique opportunity to design and create an optimal national defence force for itself, which will reflect its new and evolving national policy on defence, and therefore the needs of the nation. This poses an exciting challenge and true opportunity to move beyond survival into a new age. The essay aims to make a contribution to this process.     

The Serbian defence institution: the need for clear policy guidance to improve the Serbian defence planning,management, and command processes

ABSTRACT

The uncritical layering of western liberal defence governance norms and concepts on top of existing legacy concepts has impeded achieving coherent military capabilities and capacities when Serbia’s political and military leadership tried to reform the defence system using Western benchmarking principles and Western countries’ best practices. The process of this change has been more valuable than its actual output, as defined by increased capabilities. Such outcomes should be reflective of policy guidance, and can be thought of as closing the trinity loop of a defence planning system: plans, money and execution. This article addresses two key functional areas of the Serbian defence institution. First, it assesses the current state of defence planning to discern its strengths and weaknesses to ascertain if plans are tied to financial decision-making. Second, a full examination of current Serbian defence management is conducted to discern whether weaknesses exist that distract from producing operational capabilities. Both areas are analyzed thoroughly and some solutions for change are proposed. Also, the article analyzes the appearance of two negative phenomena in the planning process – economization and managerialism.     

Defence Procurement Policy: The Way Ahead

Abstract

The Defence Procurement Executive is the single largest customer of British industry and controls some 127 000 contracts. As Chief of Defence Procurement, Dr McIntosh explains the effects of expanding market forces on defence contracts and the suppliers, before continuing to outline the prospects for future competitive contracts in view of the recent cuts in defence budgets.     

Defence industry in Iran – between needs and real capabilities

ABSTRACT

The paper’s goal is to analyses the potential of the Iranian defence industry, including both research-and-development and production capabilities. It is argued that, despite official statements about the great power and sophistication of the Iranian defence industry, in reality its capabilities are very limited and cannot meet the operational needs of the Iranian armed forces. At the same time, it is argued that many official releases, which are abundantly available in the Iranian press and often unthinkingly repeated by the Western media, do not present the real and value of military products, but are rather a tool for deception and propaganda.     

Defence R&D expenditure: The crowding-out hypothesis

The impact of defence expenditure on the economy has been widely studied through different types of models. However, the results from these studies have not reached definitive conclusions, and have left a gap in the analysis of the impact of defence R&D expenditure at the economy level. Defence R&D has specific characteristics, which lead to market failures: public good, high risk and uncertainty, national security. Also, defence R&D creates two types of externalities: negative (crowding-out), and positive (spin-off). Crowding-out is the major economic debate about defence R&D. This paper analyses the crowding-out hypothesis by applying three types of models for the UK case: supply, demand, and demand-supply models. From these three models the most reliable is chosen and applied to the individual cases of France, Germany, Japan and USA. The paper also reports the results for the pooled data of these five countries, and for four error component models. The results from estimating such models shed light on the defence R&D crowding-out hypothesis.     

Modelling international conflict under conditions of state level economic and political uncertainty

Formal models of international conflict have tended to concentrate on change across the security dimension, assuming that the state level economic and political dimensions are constant. However, the conclusion of the Cold War suggests that over the long run these dimensions are not constant; indeed, the development of economic power, state level limits on defence expenditures, structural impediments to economic change, and several other ‘constants’ clearly do have an endogenous role in international conflict. This paper suggests one strategy for their inclusion as a causal factor in conflict modelling.